Newsflash

+++ One of AUDI ’s prized assets will be renewed this summer in the form of a 4th generation A3, which will be offered in 2 quite different flagship variants. The new A3 family hatch will be available as an improved e-tron-badged plug-in hybrid, while at the opposite end of the scale the brand will also still cater for petrolheads with an RS model tasked with taking down the new 421 hp Mercedes-AMG A 45 in style. Audi has committed to revealing 12 pure-electric models by 2025, and a car the size of the A3 has already been confirmed as one of those new products. However, it won’t be an all-electric member of the A3 family. The vehicle will be a model in its own right, pitched as a posher alternative to the Volkswagen I.D. hatch and sitting on the VW Group’s new MEB EV platform. Instead, a return of plug-in hybrid tech will see the next A3 electrified. The previous A3 e-tron was dropped last November as a result of new WLTP emissions rules, but will return to the fold in a big way with the 4th generation model. It’ll be one of a new generation of VW Group plug-in hybrid models using the next evolution of the MQB platform, which could usher in plug-in hybrids with the battery capacity to unlock 70 kilometres of pure-electric running under WLTP rules. However, we won’t have to wait until the unveiling of the new A3 to learn a lot more about the new technology lurking under the skin. That’s because the Volkswagen Golf is also due for replacement, and the 8th generation will make its debut this summer, albeit ahead of the new Audi. The A3 will borrow a lot of mechanicals from the new Volkswagen, such as the plug-in hybrid powertrain heading the way of the next Golf GTE. But it’ll also share the latest-generation Golf’s line-up of regular petrol engines, many of which will feature 12 and 48 volt mild-hybrid systems. The A3’s appearance will be updated to match the latest Audi family look, while we expect the cabin will feature the 10.1 inch central infotainment unit and Virtual Cockpit digital dash set-up seen in Audi’s Q3. But the 3-door A3 model will be dropped following poor sales. In 2017, Audi produced 7,818 examples, while 167,741 Sportbacks rolled off the production line at the brand’s Ingolstadt home in Germany. I anticipate an A3 Cabriolet will arrive a few years into the new model’s lifespan, despite being a small seller. Another A3 Limousine looks a safe bet, given it’s a strong second to the Sportback with 127,204 units produced in 2017. Audi could even introducie a longer 5-door coupé version of the A3, which would take on the new Mercedes CLA. But that’ll have to wait beyond the new model’s on-sale date, which will be early 2020. +++

+++ It seems that demand for BMW ’s 530e iPerformance model has been good, prompting the automaker to release its plug-in hybrid 5-Series as a Touring joining the already established sedan, as well as other iPerformance models, such as the 330e or the 745e. I anticipate that an official reveal could be in the works sooner rather than later, perhaps even this March at the 2019 Geneva Motor Show. Powering the 530e iPerformance Touring will be a 2.0-liter turbocharged 4-cylinder working alongside an electric motor for a total of 252 hp and 420 Nm. This very same powertrain takes the Sedan to 100 km/h in 6.2 seconds. The only available transmission is an 8-speed automatic with paddle shifters. We can also expect the Touring to wear the same 9.2 kWh battery pack, which you can charge up to 100% in less than 7 hours via a 120 volt outlet, although if you have access to a Level 2 charger, you can do it in under 3 hours. By the way, that wireless charging mat unveild by BMW last year? That should work on the 530e iPerformance Touring, too. When the car does launch and starts rolling into showrooms, customers will finally have a BMW to consider over the hybrid version of the E-Class Estate. +++

+++ DAIMLER chief executive Dieter Zetsche said the carmaker is in talks about deepening its cooperation with China’s Geely, even as German politicians draw up measures to protect German industry from foreign rivals. In October last year Daimler said it was setting up a ride-hailing joint venture in China with Geely after the Chinese company bought a 9.7 % stake in Daimler and demanded an alliance, catching German managers off guard. “We are in talks about other topics which have a bigger dimension”, Zetsche told journalists about the Chinese talks, declining to elaborate further. Germany’s government said it could buy stakes in domestic companies, including carmakers, as a way to shield them from unwanted prevent foreign takeovers, presenting a marked shift in industrial strategy. “Countries that pursue industrial policies tend not to be competitive, we did not ask for these measures”, Zetsche told journalists in Stuttgart, where Daimler was hosting its annual press conference. Daimler cut its dividend after 4thquarter operating profit plunged by 22 %, hit by trade wars, rising costs for developing electric cars and an industry downturn that has dented even the most profitable carmakers. Daimler said the return on sales at Mercedes-Benz cars fell to 7.3 % in the 4th quarter from 9.5 % in the year-earlier period as emissions tests led to supply bottlenecks and prices for luxury vehicles deteriorated. Mercedes-Benz sold 2.31 million passenger cars last year, making it the top-selling premium automotive brand in 2018, although some analysts are questioning how much longer German manufacturers can dominate the luxury car industry. Daimler said it was working on “countermeasures” to increase profits but could not mention details about possible cost cuts because they were still being worked out. “Daimler’s 2018 results, dividend cut and 2019 guidance encapsulate everything that’s going on in autos right now. Daimler ended 2018 quite weakly. Growth has stalled and costs are rising. Free cash flow is deteriorating and visibility is poor”, Max Warburton, an analyst at Bernstein Research, said. The profitability of Daimler’s cars division was below that of rivals. Daimler expects €1.45 billion in headwinds from increased currency and commodities costs this year, Chief Financial Officer Bodo Uebber said. For 2019 Mercedes-Benz Cars expects to achieve a return on sales of between 6 % and 8 %. “With our guidance for Mercedes-Benz Cars we are below our long-term target margins. We cannot be satisfied with this. Our goal is to return to our target margin corridor of 8 % to 10 % by 2021”, Zetsche said in a statement. For 2019 Daimler said it expects a slight growth in unit sales, revenue and profit. To counter falling sales and shrinking profits, carmakers are showing increased willingness to explore strategic alliances with rivals as a way to spread the cost of developing next generation cars. Daimler is talking to potential partners about how to bring down the cost of autonomous driving research even though the German carmaker remains happy with a current development alliance with supplier Robert Bosch, Zetsche said. Google’s Waymo is ahead of established carmakers in terms of its development plans for autonomous cars, Zetsche said. Daimler’s earnings before interest and tax dropped to €2.67 billion in the 4th quarter, below analysts’ expectations of €2.92 billion. Mercedes-Benz passenger car sales rose 4 % in the 4th quarter but increased tariffs on vehicles exported from the United States to China and delivery stoppages for individual diesel models hit demand and resulted in weaker prices. Mercedes-Benz exported around 30,000 units of the GLE and GLS from the United States to China last year. Daimler has no current plans to manufacture these models in China as a way to mitigate the impact of tariffs, Zetsche said. Research and development spending rose 4.5 % to €9.1 billion last year as the carmaker prepares to launch its first fully electric cross-over vehicle this year, the EQ C. +++

+++ A study has been published that confirms what motorists who drove an ELECTRIC car through the polar vortex likely already know: Freezing temperatures reduce an EV’s driving range. Research shows that, on average, the range of an electric car drops by 41 % when temperatures fall to -6 Celsius. It’s not that the battery pack can’t handle the cold; most modern-day electric cars are capable of keeping their pack within a pre-determined temperature bracket. Range decreases simply because owners turn the heater on full blast to stay warm, according to the study. The same study concluded electric cars suffer from the heat, too. Driving range drops by 17 % when it’s 35 degrees Celsius outside and motorists use the airconditioning. Electric car owners who live in areas with extreme weather are advised to plan ahead, especially during the winter months. Depending on how far they’re going, they may need to factor additional stops into their trip, and find the location of charging stations ahead of time so they’re not caught off-guard. The association also advises motorists to heat or cool the cabin while their car is still plugged in to avoid draining the battery on-the-go. And, it suggests owners park their electric car in a garage if possible. “While electric vehicle range performs best in areas with warm weather year-round such as Florida, Hawaii and California, drivers in other parts of the country shouldn’t be discouraged. Owning an electric vehicle in these regions just requires some additional planning”, the study summed up. +++

+++ FIAT CHRYSLER (FCA) shares fell 12 % after weaker-than-expected guidance for profits and industrial free cash flow this year raised doubts about the Italian/American carmaker’s longer-term targets. Chief Executive Mike Manley sought to persuade investors that the 2020 goals (set by late boss Sergio Marchionne) were still achievable, especially if the carmaker’s North American profit engine keeps spinning, new product launches lift margins and steps to fix weaknesses elsewhere pay off. “I wouldn’t put 2020 out of the picture. It’s something that’s still very much there”, the 54-year-old Briton told analysts on a call, adding the pending launches of the new Jeep Gladiator and Ram heavy-duty pickup would help drive sales. But the comments did little to reassure investors who worry about FCA’s over-reliance on one region, its weak performance in China and persistently low profitability in Europe. Weaker margins in North America in the last quarter compared with the previous 3 months also raised concerns, especially given stiff competition in the SUV and pickup markets that are vital for FCA, and the fact U.S. demand is starting to slow. “The U.S. market remains key for near term growth”, said Evercore ISI analyst Arndt Ellinghorst, adding he would be watching how the sales of higher-margin pickups and SUVs develop in the second part of 2019 and next year. The world’s 7th-largest carmaker said it expected 2019 adjusted profit of more than €6.7 billion. That is below analysts’ average forecast of €7.3 billion and suggests little improvement on 2018, when FCA posted an adjusted profit on the same basis of €6.7 billion. Guidance for industrial free cash flow of more than €1.5 billion was also down from last year’s outcome, due to higher capital spending, fines and other costs related to its U.S. settlement for diesel emissions infringements. Last year’s results came in roughly in line with analysts’ expectations, with North America accounting for 85.5 % of profits. FCA has retooled some U.S. plants to boost output of lucrative SUVs and pickups, while ending production of unprofitable sedans, and helping make up for weakness in Asia, Europe and at luxury brand Maserati. FCA’s operations in Europe, long plagued by low plant utilization rates, were hit by the transition towards tougher emissions tests which became mandatory from September. The carmaker pledged to spend €5 billion on new models and engines in Italy to try make better use of factories and boost jobs and margins. Chinese market weakness weighed on FCA’s performance in Asia and hit Maserati sales, which Manley does not expect to pick up until the later part of this year. The brand’s 2018 margins slumped to 5.7 % from 13.8 % a year earlier. Manley said FCA was open to partnerships to gain scale and drive down costs, but only with companies that “have very similar values to us”. “We can either find scale within our brands, and we have opportunity to do that, or we can find it with a partnership”, he said. Capital spending is forecast to rise this year and next, in part to fund the 2020 redesign of the high-margin Jeep Grand Cherokee and the introduction of an all-new Grand Wagoneer, both of which should bolster profits. FCA’s global portfolio lacks a mid-size pickup, a product the company had promised by 2022, and Manley said the company was still considering whether to approve production. +++

+++ FORD said it is investing more than $1 billion in its Chicago operations and adding 500 jobs as it prepares to launch 3 new SUVs this year and end production of the Taurus. Ford said it is building a new body shop and paint shop at its Chicago Assembly plant, and making major modifications to the final assembly area. At Chicago Stamping, Ford is adding stamping lines, the company added. The investment comes as Americans continue to shift away from cars in favor of SUVs, pickups and other larger vehicles. Last year, U.S. industry car sales fell 13 %, while light trucks rose 8 % to 10.9 million, accounting for about 63 % of vehicle sales. Ford announced last year it was largely exiting the sedan market in the United States with the exception of the Mustang. The company’s U.S. car sales fell 18 % last year, while SUV sales rose 0.5 %. The Chicago assembly plant will stop building the Taurus at this end of this month as it boosts SUV production. Ford said last year it was ending North American production of cars like the Focus, Fusion (Mondeo), Fiesta and C-Max. The full-size Taurus, when introduced in 1985, was credited with reviving profits at Ford. It redefined U.S. car design with its jelly bean shape and was the top-selling model in the United States 5 times between 1992 and 1997. Taurus sales, which peaked in the U.S. at 409,000 in 1992, fell to 28,706 last year. The Dearborn, Michigan, automaker is eager to highlight that it is building more vehicles than its rivals do in the United States. Ford built nearly 2.4 million vehicles in the United States in 2018. “We are furthering our commitment to America with this billion-dollar manufacturing investment in Chicago and 500 more good-paying jobs”, said Joe Hinrichs, president of global operations. By contrast, General Motors announced in November it would halt production at 5 plants in North America, including 4 in Michigan, Ohio and Maryland, as it cuts about 15,000 jobs. GM announced this week it will add 1,000 workers to build new heavy-duty pickups in Flint, Michigan. GM is also ending North American production of 6 car models. Ford said last month it will slash “thousands” of jobs in Europe as part of an overhaul that could result in plant closures and the discontinuation of some models. +++

+++ GENERAL MOTORS reported a quarterly profit that exceeded Wall Street expectations, thanks to high-margin pickups and SUVs in the U.S. market and cost cutting. All of the No. 1 U.S. automaker’s profit came from North America, where those lucrative models helped overcome an overall drop in the number of vehicles it sold. The company’s operations in China and South America combined added nothing to the company’s bottom line in the quarter. The stronger-than-expected 4th quarter profit, driven by strong U.S. results, stood in contrast to the job cuts GM has begun to make in its salaried and hourly workforces. The Detroit automaker has received political blowback, including from president Donald Trump, after announcing in late November it would not allocate new product to 5 plants in North America that mostly produce less-popular sedan models, indicating they will likely close. GM Chief Executive Mary Barra has made it clear that, despite the criticism, the cutbacks are necessary for the automaker’s long-term financial stability and to pay for the development of electric and self-driving vehicles. “We can’t run at a 70 % utilization”, Barra said about the company’s plant usage rate. “We had to improve that. It’s a transition we have to go through”. An industry rule of thumb is that automakers’ lose money when plants operate below 80 % capacity. Barra also cited the company’s efforts to shift many of the affected hourly workers to other plants, lessening the impact of the cuts among blue-collar workers. GM said it was starting to cut about 4,000 salaried workers in the latest round of restructuring announced in November. It said then it would take pre-tax charges of $3 billion to $3.8 billion to pay for the cutbacks, but expected the actions to improve annual free cash flow by $6 billion by the end of 2020. GM has said commodity and trade costs would hurt 2019 results by $1 billion. GM said that China’s $300 million in operating earnings in the 4th quarter was offset by other international markets. It sold fewer vehicles in China, its largest market by volume, and said weak currencies in South America had also impacted results. “Our outlook for China overall is for the auto industry to be flat year over year”, chief financial officer Dhivya Suryadevara told. “If you take a look at some of these economic indicators coming out of China, there are early signs of stabilization”. Buckingham Research analyst Joseph Amaturo said in a research note he remains concerned longer-term about vehicle pricing in China and North America, as well as demand in China. If China slumps, GM would be challenged to hit its financial targets, he said. Rival Ford posted a lower 4th-quarter profit as losses in every region except North America weighed on results. Toyota posted a slightly higher profit as demand for its bread-and-butter car models from cost-conscious Chinese buyers helped offset weak North American sales of its marquee sedan models such as the Corolla and Camry. U.S. new vehicle sales are expected to drop in 2019 due to rising interest rates and competition from a surfeit of cheaper, nearly-new used vehicles on the market. GM reported 4th-quarter net income of $2.1 billion versus a loss of $5.2 billion a year earlier. Excluding one-time items, it earned $1.43, above what analysts had expected. It reported a 4th-quarter loss in 2017 to adjust for an overhaul of the U.S. tax system. Excluding those charges, the automaker had reported net income of $2.4 billion. +++

+++ The Geneva Motor Show is less than a month away, and I have official confirmation that HYUNDAI won’t be attending this year’s event. The Korean company will “seek other innovative launching strategies”, the head of PR, Natasha Waddington told. The brand’s representative added that they will be present at the 2019 Frankfurt Motor Show this fall. Other major players within the automotive industry that have said ‘no’ to the Geneva Motor Show are Volvo, Ford and Jaguar Land Rover. Their decisions are based on a number of factors, from poor sales in certain markets to the fact that they have no major premieres to show off. Hyundai’s sister brand KIA , however, has adopted a different strategy. Unlike Hyundai, they will bring their latest products to the Swiss event that opens its doors for journalists on March 5 and a couple of days later for visitors. I got in touch with the corporate communications director, Stephen Kitson, who said that “Kia is definitely at Geneva this year because it has new things to show”. One of those “new things” could be the Ceed-based crossover. Believed to be named the XCeed, it’s expected to retain the front-wheel drive layout of its siblings and be powered by the same engines. The vehicle will become Kia’s alternative to the Ford Focus Active, Volkswagen Golf Alltrack and other jacked-up compact estates. They also have more new cars in development, such as the plug-in hybrid version of the Ceed Sportswagon, but this one’s rumored to debut at the Frankfurt Motor Show in September. +++

+++ NISSAN will unveil a never-before seen concept car at the 2019 Geneva Motor Show, on March 5. The study was officially announced by the Japanese automaker, which said that it’s “all-new” and nothing else. So, what is it? Truth be told, nobody outside the company knows exactly. But if I was forced to make an educated guess, I’d lean on a new subcompact SUV show car, which could work as a preview to a second-generation Juke. The latter is expected to debut later this year, with new underpinnings and perhaps an electric version that could take on the Hyundai Kona. Underpinned by the Renault-Nissan alliance’s CMF-B platform, the new Juke will continue to be powered by the group’s current crop of internal combustion engines. The family will include the 1.0-liter and 1.33-liter petrol units, and perhaps the 1.5-liter diesel. Elsewhere, the 2020 Juke is thought to receive a hybrid variant as well, just like its platform-sharing cousin from Renault, the fifth-generation Clio. +++

+++ The upcoming pure-electric version of the OPEL Mokka X will become the backbone of the SUV’s line-up as the German manufacturer looks to switch its focus from petrol and diesel power to electrification. And buyers won’t have to wait long for the EV to land in showrooms because Autointernationaal.nl can reveal the electric crossover will be launched only months after the standard Mokka X arrives at the beginning of next year; a possible debut at the 2020 Geneva Motor Show has been earmarked. The Hyundai Kona Electric rival will take its styling cues from last year’s GT X Experimental concept. It’ll ditch the typical EV looks, with a design that differs only subtly from the petrol versions. Customers “don’t want an EV to look any different”, an Opel insider told me. The new Mokka X will be based on the PSA Group’s Compact Modular Platform (CMP), which will also underpin the next-generation Peugeot 2008 and upcoming Corsa regardless of powertrain. Yet Opel will look to pitch its electric crossover not as the flagship Mokka X, but as a mainstay in the range, using it to help the company meet increasingly stringent emissions targets. My source told me the PSA Group wants its range to comprise “electric cars with petrol alternatives”, suggesting that, before long, the manufacturer considers its electrified cars will be the default choice for buyers across the new car market. The electric Mokka X is expected to lift its powertrain from the DS 3 Crossback E-Tense, which uses a 50 kWh battery under the floor. As with that car, the Mokka should charge from 0 to 80 % in 30 minutes and offer a total emissions-free range of around 300 kilometres. The CMP platform doesn’t support hybrid technology, and as such there will be no PHEV version. The new Mokka X isn’t likely to differ wildly from the current car in terms of size, but Opel will look to distance it from the boxier Crossland X, which sits on an older set of chassis components. While our source couldn’t disclose company plans, it’s likely the new Mokka X will take on a sportier look, similar to that of the GT X show car. Adding a sloping roofline and shorter front and rear overhangs would allow Opel to clearly separate its 2 B-segment SUVs. It’s too early to confirm specifications and prices for the electric Mokka X, but we can expect the new crossover to command a small premium over the petrol and diesel versions from launch. However, given how closely the models are aligned and the company’s desire to increase EV sales, the jump in list price is likely to be smaller than it is on the equivalent Hyundai Kona. +++

+++ RENAULT says it has asked judicial authorities to look at a €50,000 contribution it made that may have been used to fund former chairman and CEO Carlos Ghosn’s wedding. The evidence, which the French firm says came to light during compliance audits undertaken following Ghosn’s arrest last year on charges of financial misconduct related to his other role as chairman of Nissan. Renault says that the discovery, the first suggestion of Ghosn using Renault funds for his “personal benefit”, requires “further checks to be carried out”. The contribution was part of a larger charitable donation agreement between Renault and the Chateau de Versailles, which allowed the firm to use the palace for events. Ghosn held his wedding at Versaille in 2016, and it is thought he used the venue as part of its arrangement with Renault. Ghosn’s lawyer issued a statement offering to repay the money. It read: “Carlos Ghosn paid for all of his wedding expenses. The event space at Versailles was made available to him without charge, and Mr Ghosn was unaware that the use of the space would be charged against Renault’s allotted usage”. Renault initially kept Ghosn as chairman and CEO following his initial request, but he recently stood down from both roles to focus on his forthcoming court case in Japan. +++

+++ ROLLS-ROYCE will follow up the launch of the Cullinan with a new generation of its Ghost, due early next year. The Ghost’s front end has a clear family resemblance to the Phantom, but the rear appears to be more shapely and features a heavier sloping rear window line. The interior, while not yet seen, will adopt many of the advanced features and traditional touches found in the Ghost’s siblings. The Ghost, sitting underneath the Phantom flagship and a rival for the Bentley Flying Spur and Mercedes-Maybach S 600, has been on sale with only a small facelift since 2010. It is therefore ripe for a redesign, with more developments under the skin than are visible. While it is expected that the Ghost will still be manufactured at the brand’s headquarters in Goodwood, it’s clear that some of the car’s development and validation is occuring in BMW’s facilities. Technical details of the new Ghost are still under wraps, but I do know that it will make use of the same aluminium-intensive architecture as the latest Phantom and Cullinan. Don’t expect this to mean a substantial weight saving, however: today’s Phantom is actually heavier than the car it replaced due to increased technology and material use, both under the skin and on the surface. It is likely that Rolls-Royce will continue to use its trademark twin-turbocharged V12 engine in the Ghost, given customers demand the ultimate even from the brand’s least expensive model. It will almost certainly share the 585 hp 6.6-litre unit found in the latest BMW M760Li, though whether it will adopt that car’s 4-wheel-drive system remains to be seen. Like the recently-revised Phantom, the new Ghost will be based on the company’s all-new ‘Architecture of Luxury’ platform. The fully-scalable, all-aluminium space-frame chassis will be used to underpin all next-generation Rolls-Royces, and will replace the previous Ghost’s BMW 7 Series-based platform. A reveal will take place in 2020. +++

+++ TOYOTA ’s quarterly profit edged up as demand for its bread-and-butter car models from cost-conscious Chinese buyers helped offset bleak North American sales, although the firm’s shares slipped as it cut its annual net income outlook. Japan’s biggest automaker attributed the smaller forecast to unrealised losses from equity investments, but, in an indication that business was still strong, it kept its full-year operating profit view unchanged at 2.4 trillion yen ($22 billion). The automaker posted Asian sales of 464,000 units in the third quarter, up 15 % from a year earlier, as strong demand in China for its cheap-and-cheerful Corolla and Levin sedans continued into the end of 2018. Popularity of its luxury Lexus brand also helped it buck a broader slowdown in the world’s biggest auto market. Toyota’s global sales rose 2.8 % to 2.71 million units with Asia making up for the slack in North America, where its sales slid 7.5 % to 680,000 units. “When one region is underperforming, other regions can compensate for that weakness. Likewise, when some vehicle models are underperforming, other models can compensate”, executive vice president Shigeki Tomoyama told. “It’s a work in process, but as we diversify our markets and our models, little by little we’re starting to see this happen”. Toyota has been hit hard in the United States by slowing sales of its marquee sedan models such as the Corolla and the Camry, as well as by its steep discounting to boost sales over the past 2 years as overall demand stagnates. In contrast, the Corolla, Levin and Camry were Toyota’s top 3 selling models in China in 2018, outselling ones like the RAV4, as buyers reined in expenses amid an economic slowdown exacerbated by a Sino-U.S. trade war. Toyota sold 1.47 million vehicles in China in 2018, up 14 %, and aims to lift sales to 1.6 million this year, even as it and other automakers brace for another tough year there. Auto sales in China last year contracted for the first time since the 1990s, hurt by the phasing out of purchase tax cuts on smaller cars and the trade war. The world’s No.2 economy grew at its slowest in almost three decades in 2018, and the pace is expected to weaken further this year. But Japanese automakers, such as Toyota, Honda and Nissan, are expected to benefit from warming political ties between Tokyo and Beijing at a time when the Sino-U.S. trade war is weighing on rivals such as Ford. However, niche players such as Mazda have not been able to escape the broader China weakness. Mazda’s China sales sank 36 % to 62,000 units in the third quarter, due partly to bleak sales of its Axela / 3 sedan that is priced slightly above than sold by many of its competitors. Mazda’s global sales fell 7 %, but the lower-volume automaker still raised its annual earnings view as its quarterly operating profit dropped less than expected. Toyota cut its full-year net profit forecast by about 19 % to 1.87 trillion yen. It did not say which investments hit its net profit, but it is a major shareholder in Subaru, whose shares tumbled more than 30 % in 2018. Toyota booked an operating profit of 676.1 billion yen for the third quarter, slightly below the market’s average estimate of 680.8 billion, but up 0.4 % from a year earlier. +++

+++ VOLKSWAGEN UK boss Paul Willis has admitted to the government’s Transport Committee it has received more than 28,000 complaints of an “apparent issue” with its ‘dieselgate’ software fix to date. The number of complaints has risen by 70 % since 2017, when the company last reported findings to the Committee’s chair, Lilian Greenwood. Over 290,000 UK cars still require a software fix, not including those whose owners have turned down the work being carried out. The Transport Committee claims it has had “regular reports from owners” claiming that the recall work has impaired their car’s performance and running refinement. “It is important to bear in mind that the technical measures have been implemented in nearly 7.5 million vehicles across Europe and as noted above, in over 870,000 vehicles in the UK”, Willis claims. “The vast majority of customers have been satisfied and have reported no problems with the technical measures whatsoever”. The firm as dismissed the vast majority of UK complaints with no action taken. Most of the affected cars use the VW Group’s ‘EA189′ 1.6 and 2.0-litre diesel engine, manufactured between 2007 and 2015. Around 55,000 V6 and V8 diesels are also part of the recall, with some software updates yet to be approved by the German Motor Transport Authority (KBA). Back in 2017, Greenwood had requested an update on progress with fixing cars implicated in the emissions cheating scandal, prompting Willis to clarify Volkswagen’s recent actions regarding the issue. He maintained Volkswagen’s stance that no compensation will be offered to European customers, stating that “the issue is materially different to in the US compared to the situation in Europe”. Gareth Pritchard, founder of the Diesel Customer Forum, said: “Worryingly for owners, 870,000 cars have so far had the emissions software update in the UK, yet not one owner has had it explained to them what the fix actually does to our cars. We know there are a lot of angry owners experiencing identical issues and Volkswagen won’t explain what is going on. I suspect that the number of complaints is underestimating the scale of the issue, because not everyone affected will feel compelled to write”. +++

+++ VOLVO capitalized on a strong 4th quarter and record global vehicle sales to report its best-ever full-year earnings, but the Swedish automaker’s profit margin slid, causing it to warn that its business will remain under pressure this year. Volvo’s operating profit for the 4th quarter was 4.5 billion Swedish crowns ($488.8 million), an increase of 25 % compared with the same period last year. The company’s operating profit margin for the 3-month period was 6.2 %, up from 5.9 % during the same period last year. The positive final quarter of 2018, and record sales of 642,253 cars last year, helped Volvo set a new high for full-year earnings at 14.2 billion crowns ($1.54 billion), an increase of 0.9 % on last year. The operating profit margin for 2018, however, dipped to 5.6 % from 6.7 % last year. Volvo’s target is an 8 % margin. “I think volume was good, but financial profit is not quite were we want to be”, CEO Håkan Samuelsson told. He blames the reduced margin on the ongoing trade war between the U.S. and China, weakening overall demand for cars in Europe and China, and pricing pressure in China. “Due to the tougher climate we will start focusing on cost actions and improving operational efficiency”, he said. Companies such as Volvo are carefully scrutinizing their bottom lines in all areas as they prepare for headwinds from global trade risks, tougher emissions legislation and the pressure to launched new technology such as electric and autonomous vehicles. While Samuelsson said risks such as Washington’s trade war with Beijing, the potential of higher tariffs on cars going back and forth between the U.S. and Europe, and Brexit make market conditions “extra uncertain” right now, he doesn’t plan to join other automakers in announcing a multi-billion euro austerity plan. “We see a future with continued growth”. Global sales were up 17 % last month led by a 24 % gain in Europe. “We have no plans for layoffs because we need all our people. Our focus is on increasing our productivity in car building. Also, operationally we have to question every dollar we spend. And we are focused on reducing our materials cost”. Samuelsson believes that Volvo will set a new global vehicle sales record for the 6th consecutive year in 2019, and he won’t rule out exceeding 700,000 for the first time in the automaker’s history. “Yes it’s absolutely possible, but let’s wait and see”, he said. “If we want to reach 800,000 by the target year of 2020, we have to keep growing at the same pace as the past few years”. +++